Via Banking Day:
NAB’s UBank is the early mover on deposit rates, reducing the “Ultra bonus” rate by 25 bps yesterday.
This takes the bonus saver rate on UBank’s premium savings product to 1.85 per cent, more than 20 bps better than the rate NAB pays on a similar product under its main brand.
NAB’s move represents almost the only reduction in at call rates so far since the RBA cut the cash rate by 25 bps on Tuesday, at least as monitored by the comparison service InfoChoice.
A handful of banks have pared term deposit rates over the last couple of days, including Judo Bank and MyLife MyFinance.
So far banks big and small have deferred pricing decisions on deposit products, with many changes likely to be communicated today.
Rate conscious savers are “going to have to get used to lower rates for an even longer period of time,” Andrew Murray, CEO of Curve Securities said.
For a typical client of Curve – such as local councils – “it’s a little bit difficult; budgets are not going to be met on interest income,” Murray said.
Curve manages more than A$7 billion in deposits, a milestone the Sydney-based company passed recently, 12 years after opening shop.
“Our $7 billion in current deposits comes on the back of $78 billion deal turnover via 38,000 deals since inception,” Murray wrote in a client note yesterday.
Australia’s greatest whinger, Gottiboff, is back:
The forgotten people in the current market gymnastics are the millions of Australians who made sacrifices during their working lifetime so that they would have enough money to fund their own retirement.
They never envisaged that Reserve bank Governor Philip Lowe and Treasurer Josh Frydenberg would combine to reduce their income from bank deposits and force them to take greater and greater risks via the sharemarket to maintain their standard of living.
Those risks involve many self-funded retirees buying more shares to gain income to replace the token rates now offered on term deposits. As a result self funded retirees are now in the edge of their seats each day and night as local and overseas markets swing wildly. On Wall Street with the 10 year bonds now at a 10 year low the market fears a major share market fall. It’s not good for retirees.
Such is a market. Retirees should have anticipated that the Boomer demographic bulge would first raise inflation then crater it.
Why should the economy be ruined so that their selfish delusions can be met?
The RBA has dithered for years with rates and a currency far too high for the underlying economy. They should have cut 50bps this week and have launched QE to boot.
Gottiboff’s whining is evidence only that despite his claim to business acumen, he has no understanding of markets at all.
